Sanctioned Firms - - - Midas Securities ... Sloan Securities... Alterna Capital... Calyon Securities ... Credit Suisse (USA) ... Ferris, Baker Watts... Granta Capital ... INTL Trading ... Merrill Lynch, Pierce, Fenner & Smith ... OTA LLC ... Piper Jaffray ... Raymond James ... Track Data Securities ... et al.
Violations by Member Firms. Fines & sanctions were levied against firms for committing violations relating to: (i) Private Placements... (ii) Trade Reporting - OATS, TRACE, Riskless Principal ... (iii) Best Execution ... (iv) Short Sales ... (v) Email Retention ... (vi) Short Interest Reporting ... (vii) Securities Lending ... (viii) Unregistered Principal Supervising Branch ... November Disciplinary Actions.
Private Placements: Sloan Securities, QA3 Financial, Alterna Capital, Smith Hayes Financial Services, Trustfirst. Violations included: (i) Failed to establish and maintain a Special Reserve Bank Account of an unregistered stock offering; (ii) Released public customer funds from escrow, in a contingent private offering, before satisfaction of the contingency (e.g., before minimum contingency was met); (iv) Failed to return investor funds when minimum contingency not met.
Trade Reporting - OATS: Calyon Securities, FerrisBaker Watts, Hapolim Securities, TD Professional Execution, Wedbush Morgan. Violations included: (i) Submitted limit orders with a "Y" indicator which indicated that it had received instructions from customers that non-block limit orders should not be displayed, when no such order had been received; (ii) Data reported in non-military time; (iii) Transmitted inaccurate, incomplete or improperly formatted data; (iv) Failed to timely report ROEs and failed to transmit required info to OATS.
Trade Reporting - TRACE: Edward Jones, Northern Trust. Violations included: (i) Failed to report within 15 minutes; (ii) Failed to show correct execution time, entry time on brokerage order memoranda; (iii) , failed to maintain memoranda for orders that did not result in executions.
Trade Reporting - Riskless Principal: Goldman Sachs, INTL Trading, Merrill Lynch, Oppenheimer. Violations included: (i) Inaccurately reported 2nd leg of transaction is designated securities to the TRF because it inaccurately designated the capacity of the transactions as "principal;" (ii) failed to report correct symbol; (ii) Failed to show correct execution time, entry time on brokerage order memoranda; (iii) reported "riskless" principal orders to OATS without using correct reporting exception code.
Email Retention: Granta Capital fined $100K. Failed to preserve copies of all email communications for 3 years and/or maintain email communicationsfor first 2 years in accessible place.
Short Sales: Fig Partners,OTA LLC, Track Data. Violations included: (i) Failed to properly mark orders as short; (ii) Failed to annotate affirmative determination in prop account short sales; (iii) Executed short sales without having reasonable grounds to believe that security could be delivered when due.
Unregistered Principal Supervising Branch: Sloan Securities, James Ackerman (Principal) fined $100K. Firm allowed Ackerman, an RR acting as an unregistered principal, to supervise branch activities. Failed to prepare written inspection report of branch that included the testing and verification of its pols and procedures re: safeguarding of customer funds and securities, validation of customer address changes, transmittal of funds. failed to establish or enforce review of e-communications.
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